It was another bad week for the textile business as two more companies involved in the basic blank apparel business filed for Chapter 11 bankruptcy protection last week.

In papers filed last week, Anvil Knitwear Inc., which is based in New York and has manufacturing facilities in North and South Carolina as well as offshore, and parent Anvil Holdings both filed for bankruptcy last Monday. Anvil listed assets of $110.7 million and liabilities of $244.6 million in the petition. The U.S. Bankruptcy Court in Manhattan approved a motion by Anvil to borrow against a $40 million debtor-in-possession loan as it works toward a quick exit from Chapter 11 protection. The judge said the company can borrow up to $30 million pending an October 23 hearing.

In papers filed by Anvil, it has negotiated a reorganization plan that incorporates a deal it reached with its noteholders earlier this year which enables Anvil's senior noteholders, which are owed $130 million, to trade their debt for most of the company's common stock. The remainder would go to the holders of the company's redeemable preferred stock.

Joining Anvil last week in the line at the bankruptcy court is Delta Woodside Industries, Inc., its wholly-owned subsidiary Delta Mills, Inc., and Delta Mills Marketing, Inc., the wholly owned subsidiary of Delta Mills, but the outcome here is much more certain. The companies are expected to proceed with “an orderly wind-down of their operations designed to result in liquidation and distribution to creditors” through a Section 363 auction.

Based on papers field in Delaware, the directors and officers of each of the companies are expected to continue to oversee the operations of their respective company, subject to supervision and orders of the Bankruptcy Court for matters outside the ordinary course of business.

Delta Mills, which has reached an agreement with Delta Mills’ credit facility lender GMAC to provide debtor-in-possession financing, said it intends to fill most existing orders from its customers and to continue to operate its Beattie plant for a period of several weeks and its Delta 3 finishing plant for a longer period.

Delta Mills, which is not associated with MJ Soffe parent Delta Apparel, currently employs 600 people in South Carolina. In an unrelated matter Delta Woodside saw a worker killed at a South Carolina plant earlier in the month when the 62-year-old worker became entangled in a bale press.


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